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true; and it must follow as night the day, thou canst not then be false to any' man.”
NOTE.—The grand jury, to whom this charge was made, presented indictments against a number of parties and corporations, and the principal defendants, on arraignment, having pleaded guilty, the court imposed fines, amounting in the aggregate to $30,000; and, accepting the assurance of the accused that they would not again violate the laws against combinations in restraint of trade, no other or further penalty was imposed.
ARMOUR et al. v. ROBERTS, Internal Revenue Collector,
No. 2,904. i. INTERNAL REVENUE-RECOVERY OF Tax PaID-ACTION-PARTIES_JOINDER-
Rev. St. Mo. 1899, § 542 [Aun. St. 1906, pp. 581, 583, 745), provides taat all parties having an interest in the object of an action may be joined as plaintiff. Section 544 declares that both as to actions at law and in equity parties united in interest must join, and if one refuses he may be made a defendant; and section 767 provides that judgment may be given for or against any one or more plaintiffs or defendants, and the judgment will determine the respective rights of the parties. Held that, where an internal revenue tax was wrongfully assessed against three cestuis que trust under a will and was jointly paid under protest by the trustees, such trustees and beneficiaries were entitled to join in a single suit
against the internal revenue collector to recover the same. 2. SAME-NATURE OF OBLIGATION.
Where an internal revenue tax was erroneously assessed and collected by the government on an inheritance and was paid by the trustees under protest, the collection thereof by the internal revenue officers did not constitute a tort on the part of the government, which was under a quasi contractual obligation to repay the amount so collected under Const. Amend. 5, providing that private property should not be taken for public
use without just compensation. 3. SAME-PERSONS LIABLE.
Act Cong. June 13, 1898, imposing an internal revenue tax on certain legacies, required the executor to sign a statement to the coliector and to pay the tax to him, and section 30 gave the Commissioner of Internal Revenue control of the assessment. Rev. St. $$ 3182, 3183 (U. S. Comp. St. 1901, pp. 2071, 2072), required the collector to pay the tax into the treasury, and declared that on the death of the collector all lists should be transferred to his successor; and Act Cong. Feb. 8, 1899 (U. S. Comp. St. 1901, p. 697), declared that an action against such collector should not abate by his death, but his successor should be substituted as defendant. Held that, where the collector wrongfully received an inheritance tax on bequests which were not taxable, on his death the liability to refund was enforceable against his successor in office, it being the duty of the Commissioner to pay any judgment rendered against the collector as
provided by Rev. St. $ 3220 (U. S. Comp. St. 1901, p. 2086). Frank Hagerman, for plaintiffs.
A. S. Van Valkenburgh, U. S. Atty., and L. J. Lyon, Asst. U. S. Atty., for defendant.
MCPHERSON, District Judge. This case is pending on a demurrer of the defendant to plaintiffs' amended petition.
The amended petition recites that September 27, 1901, Kirkland B. Armour, a resident citizen of Kansas City, Mo., died, leaving surviving him his widow, Annie H. Armour, and his three children, Andrew Watson Armour, born April 3, 1882, Lawrence H. Armour, born March 8, 1888, and Mary Augusta Armour, born October 4, 1893. Kirkland B. Armour left a will naming the plaintiffs, Charles W. Armour and Annie H. Armour, as executor and executrix of his estate, by which will he devised the homestead and the contents thereof to his widow, and all the balance of his estate he left in equal proportions to his widow and said three minor children, the interests of said minor children to be held during their minority by the said Charles W. Armour and Annie H. Armour as trustees, with full power to invest, reinvest, exchange, sell, and dispose of the property vested in them as they should see fit, and providing that there be no right of possession or enjoyment in said minor children during their minority, and providing that the interests going to said children were not capable of being immediately possessed or enjoyed by them. October 18, 1901, said Charles W. Armour and Annie H. Armour were, by the probate court at Kansas City, duly appointed and qualified as executor and executrix of said estate, which they did upon proper notices and proceedings, and the said estate was finally closed, and their accounts as executor and executrix finally settled by order of the said probate court February —, 1904, and they were discharged, and the said estate was ordered to be delivered to the said trustees. But the claim and cause of action herein was never in any way divided or split up, but the same, with other personal property held by the said trustees and Andrew Watson Armour, was held without any division between them or between any of the parties. Prior to September 25, 1902, and until the day of May, 1904, when he died, one Frank D. Roberts was United States collector of internal revenue in the district of which Kansas City, Mo., is and was a part: June 1, 1901, the defendant herein was appointed and qualified as his successor, and he ever since has been and still is such collector for said district. September 25, 1902, the said executor and executrix of said estate, at the demand of the said Frank D. Roberts, as collector, made a return to him of said estate and of the legacies therein, upon the forms prepared by and under the direction and authority of the Commissioner of Internal Revenue, and the United States, by the said Internal Revenue Commissioner, made a pretended levy and assessment, under the law regulating the taxation of legacies and inheritances, against the said estate and the legacies passing therefrom. Said levy and assessment made the said tax aggregate $51,751.59, which amount the said collector demanded of the said executor and executrix, and threatened to enforce the payment thereof with penalties, by reason of which, September 26, 1902, the said executor and executrix, out of the general funds of the estate and in a lump sum, paid to the said collector under protest, and with notice that the said tax was illegal, and that steps would be taken to have the same refunded and recovered. The assessment of legacies and distributive shares arising from personal property of every kind of said estate, in charge of said executor and executrix, aggregated $3,680,113.56, of which amount one-fourth was found to be exempt, because under the will such was the amount that would be taken by the widow. The amount of the legacies of the said legatees, their relationship to the deceased, the amount levied and claimed to be subject to taxation, the rate of taxation, and the amount then and there demanded by the United States and paid as aforesaid to Frank D. Roberts as collector, is set out in the schedule, assessment, and levy, which were in these words:
"United States Internal Revenue.
"Legacies and Distributive Shares. "Sections 29 and 30, Act of June 13, 1898, as Amended by Sections 10 and 11
of an Act Approved March 2, 1901. "Schedule of legacies or distributive shares arising from personal property of any kind whatsoever, being in charge or trust of Charles W. Armour and Annie H. Armour, as executor and executrix, said property passing from Kirkland B. Armour of the city of Kansas City, county of Jackson, and state of Missouri, who deceased upon the 27th day of September, 1901, to the persons hereinafter mentioned, by will or by the intestate laws of Missouri; also the amount of such property, together with the amount of duty or tax which has accrued or should accrue thereon agreeably to the provisions of the internal revenue laws of the United States : Appraised value of personal estate...
$ 3,880,119 33 Total amount legal debts and expenses to which the personal property is liable.....
November 18, 1902, said executor and executrix in writing, under oath, and upon a form prepared by the Internal Revenue Commissioner for such cases, appealed to said Commissioner, and made application to him to have said sum of $51,751.59 so paid refunded, stating in detail and in form satisfactory to the Commissioner the claiin of illegality, but the said appeal was by the said Commissioner denied, and he, after a hearing, refused to refund the said sum and tax paid, or any part thereof. The claim of the United States was wholly illegal, and the assessment and levy made were void, and the collection of said taxes wholly unauthorized by law. None of the legacies so taxed had vested when the tax was levied or collected, none of them capable of being immediately possessed or enjoyed, and none of them could, under the terms of the will, vest until the legatee reached majority. Each and every act of the collector herein mentioned was done under the direction of the Commissioner of Internal Revenue and proper officers of the United States. Plaintiffs pray judgment for the sum of $51,751.59, with interest at the rate of 6 per cent. per annum from September 25, 1898, and for costs. Such is the amended petition.
The defendant has demurred thereto, on the grounds: (1) There is a misjoinder of parties plaintiff. (2) Several causes of action have been improperly united. (3) Facts sufficient to constitute a cause of action are not stated. (4) There is no cause of action stated against the defendant, Charles W. Roberts, collector.
First, as to the objection of misjoinder of parties plaintiff, and of causes of action. If allowable, and if this case were by bill in equity, the objection of multifariousness would not avail defendant. The pivotal question in the case is, as to whether the action can be maintained against the defendant to recover back the moneys thus paid. That question is common to all the plaintiffs, and no additional expense would be incurred by the defendant whether the action was brought by one or all the plaintiffs, and the evidence would be the same. But this is an action at law, and defendant contends that there is a misjoinder. The purpose in adopting a code of practice was to, in large part, make the principles of equity practice controlling in actions at law. The technicalities of the common law could be learned, but too often by no two men concerned in a case, at the bar or on the bench, alike. Needless expense, parties wrongly thrown out of court, multiplicity of suits, and delays were supposedly made matters of history when the Codes were enacted. So that if the parties have a common interest, although differing in value, they can all join. And if one refuses to join he can be made a defendant, and one adjudication puts all the questions at rest. And the objection so often stated, that complications will arise in taking a verdict of a jury, is an objection of no force. Under most of the Codes the court upon request must take special findings, and in this court special findings may be taken. The trouble is wholly imaginary. That the former equitable principles are brought forward into the Codes, one need but read both the text and cases cited in Bliss on Code Pleading, $S 25, 72-76. State v. Thornton, 56 No. 325; Walker v. Deaver, 79 Mo. 664; Insurance Co. v. Gilman, 112 Ind. 7, 13 N. E.. 118; Winne v. Insurance Co., 91 N. Y. 185; Trompen v. Yates, 92 N. W. 617, 66 Neb. 525; Schiffer v. Eau Claire, 51 Wis. 385, 8 N. W. 253; Lyon v. Bertram, 20 How. 149, 15 L. Ed. 817; Phinny v. Warren, 52 Iowa, 332, 1 N. W. 522, 3 N. W. 157, under a Code like that in Missouri. I need not multiply cases. They are numerous, and particularly so in the Missouri Reports, construing the Missouri Code as to joinder of parties and actions. And this could not be otherwise, as will be seen from reading sections 511 and 542, Rev. St. Mo.
1899 (Ann. St. 1906, pp. 581, 583, 745]. A literal and technical reading of those statutes give the right to join the parties as is here done. But still stronger does this appear when a liberal construction is given the statutes, and that is the construction called for by the authorities. Section 512 provides that all parties having an interest in the object of the action may be joined as plaintiffs. Section 767 provides that judgment may be given for or against any one or more plaintiffs or defendants, and the judgment will determine the respective rights of the parties. Section 544 provicies, both as to action at law and equity, that parties united in interest must join, and if one refuses he may be made a defendant. So I conclude that on the question of pleading the contention of the defendant is without merit, unless the action of the collector were at least two separate torts. And that suggestion involves the determination of the case on its merits.
Oftentimes it is difficult to determine whether a case is in contract or sounds in tort. The question under our "fact pleading" seldom arises, except as to the measure of damages, or the statute of limitations. But in actions against the United States it is jurisdictional. In the case at bar, it is not claimed that there was an express contract, and the defendant claims the acts of the collector were a tort. The United States attorney and his assistant, in argument at the bar, conceded that the government now has the large sum of money morally, and perhaps legally, belonging to plaintiffs, and, while not saying in language, the answer to the plaintiffs was, in effect and meaning, there is no way to reimburse the plaintiffs. The honor and integrity and fair dealing of our government ought to be, and is, on the same high plane that exists between citizens of high character, and the powerful should not take from the weak without compensation. And the spirit of fair dealing of our government can only be preserved by and through its agencies, one of which is the courts. So that it follows, as will be conceded by every person, that the government should make restitution of this money, and, if the power to do so is not with some officer, it should be adjudged by this court, if it has the jurisdiction to do so.
Whether the act of the collector was a tort, or an implied contract to refund by his superior, must be deterinined from a very few facts. The government, as per statutes, has the right to tax. The statute in question was open to two supposed constructions. The Conimissioner of Internal Revenue adopted that construction in favor of the government. In doing so, he acted in goorl faith, and with the best of motives. He believed he was within the law, and, so believing, exacted the return and the payment. But it turned out that he was mistaken in his interpretation of the statutes, as was held by the Supreme Court in the case of Vanderbilt v. Eidman, 196 U. S. 480, 25 Sup. Ct. 331, 49 L. Ed. 563, denying the contention of the government and its law officers, and reversing the Circuit Court. So that whether, in the case at bar, the collector did a wrong amounting to a tort when he made the collection, must be decided. If it were a wrong, it can only be avoided by doing another wrong, viz., refuse to abide by a recent decision of its highest court, concurred in by all the Justices. To establish one wrong, another wrong must be done. The fifth amendment to the Constitution provides: "Nor shall private property be